Currently, producers are assigning greater importance to consumer-related fruit quality traits rather than disease resistance traits because of the better understanding of the impact of marketing on production (Yue et al., 2013). In recent years, eating locally grown produce has become increasingly popular (Chamberlain et al., 2013; Denver and Jensen, 2014). Several studies have shown that consumers are willing to pay a premium for locally grown (Bond et al., 2006; Wang et al., 2010; Yue and Tong, 2009) and certified organic food (Bernard and Bernard, 2010; Biing-Hwan et al., 2008; Yue and Tong, 2011). Local farms and small businesses are motivated by these higher price premiums and hence interested in analyzing production cost efficiencies to take advantage of these niche market opportunities (Biing-Hwan et al., 2008; Carpio and Isengildina-Massa, 2009; Yue and Tong, 2011).
The market for organic foods has increased substantially in the last decade (Smith et al., 2009) as has the land dedicated to organic food production [U.S. Department of Agriculture (USDA), 2013a]. For instance, the number of organic certified cropland has increased from 1.22 million acres in 2000 to 3.08 million acres in 2011 (USDA, 2013a). The U.S. Certified Organic Production Survey showed that the value of certified organic sales totaled $3.53 billion in 2011. The top five states—California, Washington, Oregon, Texas, and Wisconsin—accounted for over 62.8% of the total certified organic product value of sales (USDA, 2012).
Although the harvested 13,363 acres of certified organic apples represented only 0.43% of the certified organic cropland acreage in the United States in 2011, certified organic apples represented 3.4% of the total sales ($121.4 million) of all organic produce that year (USDA, 2012). These acres produced 282.2 million pounds of organic apples. Fresh market sales (244.9 million pounds) accounted for $113.7 million, whereas processing sales (37.2 million pounds) accounted for $7.6 million. Washington State accounted for 84.0% of those certified organic apple sales, followed by California (10.2%), Arizona (2.0%), Michigan (1.2%), and Colorado (1.1%). The southern U.S. states lag behind these states in both acres harvested and certified organic apple sales (USDA, 2012).
Peck et al. (2010) reported that a price premium would be needed to offset the higher variable costs of producing disease-resistant apples under an organic fruit production system in the northeastern United States. Mon and Holland (2006) have shown that organic apples can be both profitable and sustainable in the Pacific northwestern United States. However, there is limited published research on organic apple orchard profitability in the southern U.S. region. Surveys of southern U.S. stakeholders indicated that great opportunities exist (e.g., expanding population base in the south, strong tradition of fruit production in the region, strong agricultural heritage, and strong local foods awareness) for markets of both fresh and processed fruit, but significant challenges exist. These challenges include a lack of information available on the economic impacts of different organic production practices and the potential returns available from organic production (Rom et al., 2007).
In response to these challenges, an apple interactive economic decision support tool (AIEDST) was developed to assist producers in making informed decisions regarding organic apple production in the southern United States. The objectives of this manuscript are to 1) describe the development of this interactive economic decision support tool and 2) provide an example of how it works. This example does not represent any particular orchard and is not intended to be a definitive guide of how to grow organic apples. However, it can be helpful in understanding the investment requirements of and potential returns from comparable organic orchards.
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